UK watchdog demands credible plan for nationalised British Steel as costs balloon
Britain's public spending watchdog has warned of soaring costs in keeping nationalised British Steel afloat and is demanding the government produce a credible long-term plan for the company.
The UK parliament's public accounts committee has called on the Labour government to finally set out a workable economic plan for British Steel, warning that the cost of keeping the nationalised manufacturer running is spiralling with no clear end point.
The company was brought into public ownership in July to secure the future of domestic steel production, 15 months after ministers first intervened to stop the closure of the Scunthorpe steelworks and the loss of roughly 4,000 jobs.
Keeping British Steel operating currently costs £1.3m every day, and the total bill could reach £1.5bn by 2028. By mid-June, the government had already spent £555m on staff wages and raw materials alone, not counting fees paid to external advisers.
No clear business model
The committee said that nearly a year and a half after taking control, the Department for Business and Trade still cannot explain what business model would put British Steel on a sustainable financial path, nor has it offered even rough estimates of the ultimate cost to taxpayers or how long public support will need to continue.
Clive Betts, the committee's deputy chair, said the original rescue was justified but was only ever meant to be a first step — the government must now lay out its long-term plan. He said British Steel currently cannot cover its own costs, and called for assurances that the scale of funding it receives does not come at the expense of the wider steel sector.
Wider industry pressure
The criticism came just days after the government also nationalised Speciality Steel UK, a Yorkshire-based producer and Britain's third-largest steelmaker, to protect around 1,300 jobs. The committee warned that the government cannot direct all its resources to British Steel while other parts of the industry may also need support.
Separately, British Steel's former owner, China's Jingye Group, claims it was owed almost £1bn at the time of nationalisation and has launched a formal international treaty process seeking compensation from the UK government. The dispute has added strain to UK-China relations, with Beijing saying it is strongly dissatisfied with how the situation has been handled.
